Britain's partnership with India on education, research and innovation should be a partnership of equals in recognition of India's growing economic importance, UK Prime Minister David Cameron said on a visit to the sub-continent. The second phase of the UK-India Education and Research Initiative was announced.

In a speech in Bangalore on 28 July, Cameron said: "Education is not just vital for national success, it is one of the best growth businesses of the 21st century. I want us in Britain and India to pool some of our advantages for our mutual benefit."

Britain committed £2.5 million (US$3.9 million) to the UK-India Education and Research Initiative (UKIERI) over the next five years, while India will match the sum via its University Grants Commission.

Through the UKIERI collaboration the two nations will join hands to set up new institutes, increase skills development programmes, hold leadership programmes and work on quality assurance of courses offered to students.

From now on each country will pitch in an equal amount of money. This marks a shift from previous decades when Britain was the bigger partner, largely funding the setting up of Indian Institutes of Technology (IITs).

"The relationship has changed from mentor to partner. When India was setting up the first IITs (in the 1960s) it did not have either expertise or money. Now we have both and can look at the UK as an equal," a senior Indian government official said.

Since 2006 UKIERI has overseen around 500 new UK-Indian partnerships, from schools through to higher education, which are helping to drive world-class research into issues such as climate forecasting, biomedicine and oceanography.

Cameron also said that some of Britain's aid to India could be redirected to education. This was in response to domestic calls for Britain's development aid to India to be scaled back, now that India is emerging economically.

In an interview with the BBC while he was in India, Cameron said: "Education is another area where aid money can be used in some circumstances to grow educational opportunities in India that are also opportunities for Britain."

The British government has encouraged UK universities to internationalise their higher education provision and seek out Indian partners to develop mutually beneficial research projects, skills programmes, exchange schemes and complementary curricula.

The two countries are already collaborating on a new IIT at Ropar in Punjab, and the new Indian Institute of Science Education & Research (IISER) in Pune, with five UK universities involved, including London's Imperial College.

"The delegation is keen to extend the India-UK collaboration further to include diverse fields such as energy, food security, water, urban development, sustainability, public health, cultural heritage and English language at undergraduate and higher levels," the Indian official said.

India's proposal to set up Innovation Universities, as the 14 new centres of excellence are known, has also found favour with the UK, which has formally expressed interest in developing these and other institutions.

While visiting IIT Madras David Willetts, UK Higher Education and Science Minister, one of a handful of ministers accompanying Cameron to India, said: "Oxford, Cambridge, Imperial, Essex, Birmingham, Newcastle, Exeter and the Open University are eager to forge links during the design and eventual creation of the new innovation universities."

He said he would be visiting India again in November, accompanied by leading British vice chancellors, to establish a framework for collaboration between British institutions and the innovation universities.

"The UK already has more than 80 university-related collaborations up and running in India, making us the most active international partner here. We seek to move things on substantially," Willets said.

The Indian government is keen to welcome foreign universities to set up campuses in India, which will be permitted by the Foreign Education Institutions Bill, currently going through parliament, and leading British universities are keen to collaborate.

Willets said he was confident that future co-operation would bring more UK students to India.